(Reuters) - IT services major Accenture (NYSE:ACN) unveiled a $4 billion share buyback on Thursday and beat quarterly earnings expectations thanks to strong demand for its services that help businesses adopt generative AI technology.
Accenture's generative AI business has been outpacing the growth in its other core businesses as organizations look to automation to curtail costs and improve efficiency.
Generative AI revenue stood at $900 million for the fiscal year, compared to $100 million last year. Bookings have shown robust quarter-on-quarter acceleration for the past four quarters, reaching a total of $3 billion for the year.
"We are seeing the continued trend of trying to save money on IT to free up the spending on areas of generative AI," Accenture CEO Julie Sweet said in a post-earnings call.
Outgoing CFO KC McClure said generative AI will drive growth for the company in the next decade.
Accenture plans to return at least $8.3 billion in cash to shareholders through buybacks and dividends in the next fiscal year. It has already returned about $6.7 billion to shareholders through buybacks.
However, the company's forecast for growth in annual revenue between 3% and 6% missed the midpoint of the analysts' average estimate of 5.9% growth.
The revenue growth estimate also includes a 3% inorganic contribution through a clutch of recent acquisitions. The company also plans to invest $3 billion in acquisitions in the next fiscal year.
Accenture expects a "cautious environment" to continue into the next year. "The macro environment is going to click down in the U.S. and maybe a little better in Europe. We are not expecting a big change in overall spending," said CEO Sweet.
Shares of the Dublin-based company were up 4.5% in early afternoon trading.